Enhancers are eukaryotic promoter elements that increase transcriptional efficiency in a manner relatively independent of their position and orientation with respect to a nearby gene. There is growing evidence that enhancer action is mediated by transacting factors, but the mode of action of these factors is not yet known. We report here on the Xenopus U2 gene promoter, which contains two sequence elements. The distal sequence element increases promoter activity 20-fold by facilitating the formation of stable transcription complexes. A synthetic 14-base-pair (bp) oligonucleotide corresponding to part of the distal sequence element, which shows homology to an immunoglobulin gene promoter element and to both the simian virus 40 (SV40) and the immunoglobulin heavy-chain gene enhancers, stimulates transcription in an orientation-independent manner.